Knowing when to throw in the towel

If you want to be a bad product manager, never think of discontinuing a product. As long as it’s making money, why would you want to stop it? Sure, revenue may be a bit off its peak, but as long as its profitable there’s no reason to change. Plus, what does it say about you as a product manager if you are supposed to “manage” a product and you’re talking about getting rid of it — then what do you manage? Your job is to keep that product in the market for as long as possible and do whatever you need to do to make that happen.

If you want to be a good product manager, phase out products when appropriate. Discontinuing products isn’t a sign of an inept product manager; in fact, it’s the sign of a responsible one who understands the economics involved. Yes, the product may be profitable on paper, but that often isn’t the only factor. A product could be taking revenue away from other products. There may be hidden costs or overhead that aren’t factored into the financial analysis. Even though the product is profitable, there may be other products or projects to which resources could be devoted and yield higher returns.

Product managers may keep products on life support for extended periods of time because they are afraid their own careers, but a product manager who can successfully discontinue one revenue stream while developing other opportunities is an asset to an organization and should not feel threatened. If you can manage one product well, you can likely manage others well also.

There are good arguments against following the product lifecycle too literally, since especially the switch from maturity to decline can become a self-fulling prophecy. However, it’s worth looking at the product lifecycle, evaluating revenue, profit, and unit costs over time, and asking critical questions of the results. Is a dip in revenue really the beginning of a decline or because we had problems with our sales force last quarter? Are we really switching from growth to maturity or could we extend growth by improving our marketing investment and effectiveness? Good product managers can use these tactics to increase the profitability of their products for as long as possible and also know when and how the product lifecycle should end.

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